Cryptocurrency

The mass introduction of a digital euro may very well be a “clear damaging” for European banks: BofA

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A digital euro may be a long way off, but Bank of America warns that if there is widespread public acceptance, it could be bad news for the region's banking industry.

In a report on Tuesday, BofA analysts said that if viewed as a popular alternative, euro digital accounts for individuals would reduce commercial bank deposits and potentially damage the region's banking sector.

"Like Internet data, money has a strong tendency to monopoly," the analysts found in the report. The European Central Bank is concerned about the Libra (now Diem) Association, which is working to get its Diem dollar stablecoin off the ground, as well as China's continued efforts with its digital yuan. "The ECB sees the risk of a monopoly," say the analysts, and may think it is "better to act quickly and guarantee a digital euro".

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Melinda Martin